CHAPTER 128. AGRICULTURAL CHEMICAL AND SEED LIENS
AGRICULTURE CODE
TITLE 5. PRODUCTION, PROCESSING, AND SALE OF HORTICULTURAL
PRODUCTS
SUBTITLE H. HORTICULTURAL LIENS
CHAPTER 128. AGRICULTURAL CHEMICAL AND SEED LIENS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 128.001. DEFINITIONS. In this chapter:
(1) "Agricultural chemical" includes fertilizer material as
defined under Section 63.001, pesticides as defined under Section
76.001, plant regulators as defined under Section 76.001, lime,
plant and soil amendments, plant food, herbicides, and chemical
compounds that are applied to crops or to land used for growing
crops.
(2) "Agricultural seed" has the meaning assigned under Section
61.001.
(3) "Labor" means labor or services performed in the
application, delivery, or preparation of an agricultural chemical
or agricultural seed.
(4) "Reasonable or agreed charges" means:
(A) any agreed price for agricultural chemicals, agricultural
seeds, or labor sold or provided to a lien debtor at the lien
debtor's request; or
(B) the reasonable value of agricultural chemicals, agricultural
seeds, or labor, as of the date of application, delivery, or
preparation, if there is not an agreed price or an agreed method
for determining price.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.002. PROCEEDS. (a) For the purposes of this chapter,
proceeds are the amounts received by a lien debtor, before a
deduction for taxes, fees, or assessments or a deduction made
under a court order, from the sale of:
(1) the crop that existed at the time of application on the land
of the agricultural chemical sold by the lien claimant or
applied, delivered, or prepared by the lien claimant;
(2) the first crop produced on the land after the agricultural
chemical sold by the lien claimant or applied, delivered, or
prepared by the lien claimant was applied, if crops did not exist
on the land at the time the agricultural chemical was applied; or
(3) the crop produced from the agricultural seed supplied by the
lien claimant or applied, delivered, or prepared by the lien
claimant.
(b) For the purposes of this chapter, the following are not
included as proceeds:
(1) amounts due or owing to a cooperative association under
Chapter 51 or 52; or
(2) amounts retained by a cooperative association under Chapter
51 or 52.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
SUBCHAPTER B. AGRICULTURAL CHEMICAL AND SEED LIEN
Sec. 128.006. NOTICE BEFORE PURCHASE; REQUIRED NOTICE BEFORE
CLAIMING LIEN. (a) A person claiming a lien under this chapter
must have provided notice of the provisions of this chapter,
before purchase, either generally to purchasers of agricultural
chemicals, agricultural seeds, or labor as part of the lien
claimant's normal business practices or specifically to the lien
debtor. Notice provided under this subsection must read, to the
extent applicable, substantially as follows: "The sale of
agricultural chemicals or agricultural seed on credit and the
provision of labor related to agricultural chemicals or
agricultural seed is subject to Chapter 128, Agriculture Code.
Failure to pay the agreed or reasonable charges for the
chemicals, seed, or labor may result in the attachment of a lien
to the proceeds of the agricultural products produced with the
aid of the chemicals, seed, or labor." A potential lien claimant
may satisfy the requirements of this subsection:
(1) by printing or stamping the notice on credit applications
filled out by purchasers; and
(2) for future purchases by purchasers who are not notified on
the credit application, by printing or stamping the notice on an
invoice or on a statement sent by separate cover.
(b) Before a person may claim a lien under this chapter, the
person must send to the debtor by certified mail written notice
that states:
(1) that the payment of the reasonable or agreed charges is more
than 30 days overdue;
(2) the amount that is overdue;
(3) that the debtor has the following three alternatives:
(A) to allow the lien to be filed;
(B) to enter into an agreement granting a security interest in
the proceeds described by Section 128.002 under the Business
& Commerce Code; or
(C) to pay the reasonable or agreed charges; and
(4) in at least 10-point type, that:
(A) the debtor has until the 10th day after the date on which
the notice is received to select an alternative under Subdivision
(3), notify the claimant of the alternative selected, and satisfy
all the requirements of the selected alternative; and
(B) the claimant may file the notice of claim of lien at any
time after the 10th day after the date on which the debtor
receives the notice if the debtor does not comply with the
requirements of Paragraph (A).
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.007. ATTACHMENT OF LIEN. (a) A lien established under
this chapter attaches to the proceeds described by Section
128.002.
(b) A lien established under this chapter attaches on the first
day agricultural chemicals, labor, or both are furnished to the
lien debtor. A lien that has attached under this section is
removed if the lien claimant does not satisfy the notice and
filing requirements of this chapter.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 292, Sec. 1, eff.
Sept. 1, 1997.
Sec. 128.008. AMOUNT OF LIEN. The amount of a lien under this
chapter is equal to the sum of:
(1) the amount of the unpaid reasonable or agreed charges for:
(A) agricultural chemicals, labor, or both, as appropriate,
furnished within the 180-day period immediately preceding the day
the notice of claim of lien is filed with the secretary of state
as provided by this chapter; and
(B) agricultural seeds, labor, or both, as appropriate,
furnished within the 180-day period immediately preceding the day
the notice of claim of lien is filed with the secretary of state
as provided by this chapter; and
(2) the filing fees for the lien as provided by this chapter.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 292, Sec. 2, eff.
Sept. 1, 1997.
Sec. 128.009. PERSON ENTITLED TO FILE; EXCEPTION. (a) Except
as provided by Subsection (b) or by Section 128.047, a person who
provides an agricultural chemical, agricultural seed, or labor
may file a notice of claim of lien as provided by this chapter.
(b) A claimant may not file a notice of claim of lien if the
settlement of a dispute between the claimant and the debtor has
been submitted to the department and is pending.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 292, Sec. 3, eff.
Sept. 1, 1997.
Sec. 128.010. PERFECTION OF LIEN. A lien created under this
chapter is perfected on the filing of a notice of claim of lien
with the secretary of state as provided by this chapter.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.011. DURATION OF NOTICE OF CLAIM OF LIEN. (a) Except
as otherwise provided by this chapter, the notice of claim of
lien is effective, and a new notice of claim of lien is not
required to maintain the lien, as long as the person who provides
the agricultural chemical, agricultural seed, or labor either:
(1) remains unpaid for the amount secured by the lien; or
(2) continues to provide an agricultural chemical, agricultural
seed, or labor on a regular basis to the lien debtor.
(b) For purposes of this section, providing an agricultural
chemical, agricultural seed, or labor is not considered to be
made on a regular basis if a period of more than 45 days elapses
between applications, deliveries, or preparations.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.012. PROCEDURES FOR SETTLEMENT OF DISPUTES. (a) The
commissioner of agriculture by rule shall establish a procedure
to settle a dispute between a claimant supplying agricultural
chemicals or labor in the application, delivery, or preparation
of agricultural chemicals and a debtor. The procedures must
provide:
(1) a time requirement for submitting the dispute to the
department;
(2) a time requirement within which a notice of the dispute must
be submitted to each party; and
(3) a process for evaluating the dispute.
(b) Each party to the dispute is equally liable for the
reasonable costs incurred by the department in carrying out this
section.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.013. CONTENTS OF NOTICE OF CLAIM OF LIEN. The notice
of claim of lien must include:
(1) the name and address of the lien claimant;
(2) the name and address of the lien debtor;
(3) the location of the property to which the agricultural
chemical, agricultural seed, or labor was provided;
(4) a statement that the payment of the reasonable or agreed
charges is more than 30 days overdue;
(5) the amount that is overdue;
(6) a statement, signed under penalty of perjury, that:
(A) the lien claimant provided notice of the provisions of this
chapter, before purchase, either generally to purchasers of
agricultural chemicals, agricultural seeds, or labor as part of
the lien claimant's normal business practices or specifically to
the lien debtor, in the manner required by Section 128.006(a);
(B) the lien claimant sent to the lien debtor the notice
required by Section 128.006(b);
(C) more than 10 days have elapsed since the date on which the
notice was received by the lien debtor; and
(D) the lien debtor has not complied with the requirements of an
alternative set out by Section 128.006(b); and
(7) a statement that the lien claimant has an agricultural
chemical or agricultural seed lien under this chapter.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.014. SIGNATURE. The notice of claim of lien shall be
signed by the lien claimant or by a person authorized to sign
documents of a similar kind on behalf of the claimant.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.015. FORM. (a) The notice of claim of lien must be
filed on a form that satisfies the requirements of a financing
statement under Sections 9.502-9.504, Business & Commerce
Code, except that:
(1) the lien claimant may be identified either as a lien
claimant or as a secured party;
(2) the form must be signed by the lien claimant and is not
required to be signed by the lien debtor; and
(3) in the space for the description of the collateral, the
information specified in Sections 128.013(3), (4), (5), and (7)
must be entered.
(b) A separately signed statement containing the information
specified in Section 128.013(6) shall be attached to the form
required under Subsection (a).
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.01, eff.
July 1, 2001.
Sec. 128.016. FILING AND MARKING IN OFFICE OF SECRETARY OF
STATE; FEE. (a) The notice of claim of lien shall be filed and
marked in the office of the secretary of state in the same manner
as a financing statement is filed and marked under Section 9.519,
Business & Commerce Code.
(b) The uniform fee for filing and indexing and for stamping a
copy furnished by the secured party is the same as the fee
assessed under Section 9.525, Business & Commerce Code.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.02, eff.
July 1, 2001.
Sec. 128.017. TIME OF WRITTEN NOTICE. The lien claimant shall
provide written notice of the claim of lien to the lien debtor
not later than the 10th day after the date the notice of claim of
lien is filed with the office of the secretary of state.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.018. RECOGNITION OF NOTICE AS FINANCING STATEMENT. The
secretary of state shall recognize a notice of claim of lien
under this subchapter as a financing statement under Subchapter
E, Chapter 9, Business & Commerce Code.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.03, eff.
July 1, 2001.
SUBCHAPTER C. PRIORITY OF LIEN
Sec. 128.026. TIME OF FILING. (a) A lien created under this
chapter has the same priority as a security interest perfected by
the filing of a financing statement on the date the notice of
claim of lien was filed.
(b) A lien created under this chapter does not have priority
over labor claims for wages and salaries for personal services
that are provided by an employee to a lien debtor in connection
with the production of agricultural products, the proceeds of
which are subject to the lien.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
SUBCHAPTER D. INFORMATION CONCERNING LIEN
Sec. 128.031. ISSUANCE OF CERTIFICATE TO MEMBER OF PUBLIC; FEE.
(a) A person may obtain a certificate identifying any lien on
file and any notice of claim of lien naming a particular debtor
and stating the date and time of filing of each notice and the
names and addresses of each lienholder in the certificate.
(b) The amount of the fee for a certificate under Subsection (a)
is the same as the amount of the fee provided by Section
9.525(d), Business & Commerce Code.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
547, Sec. 6, eff. September 1, 2009.
Sec. 128.032. COPIES OF NOTICES OF CLAIM OF LIEN AND OTHER
NOTICES; FEE. (a) A person may obtain a copy of any notice of
claim of an agricultural chemical or seed lien filed.
(b) The fee for a copy of a notice of claim of lien obtained
under Subsection (a) is in the amount provided by Section
405.031, Government Code.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
547, Sec. 7, eff. September 1, 2009.
SUBCHAPTER E. ENFORCEMENT OF LIEN
Sec. 128.036. WRITTEN NOTICE TO SECURED CREDITORS BY LIEN
CLAIMANT. (a) A lien claimant shall provide written notice to
any secured creditor at least 30 days before the date the lien
claimant enforces a claim of lien.
(b) For purposes of this section, "secured creditor" means any
entity named as a secured party in a financing statement that is
filed regarding the debtor and that covers:
(1) a farm product, an account, or a crop subject to the lien;
(2) a crop growing or grown on the land on which the
agricultural chemical was applied or for which the agricultural
seed was supplied; or
(3) the next crop to be grown on that land, if a crop is not
planted.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.037. FORECLOSURE IN ACTION TO RECOVER REASONABLE OR
AGREED CHARGES. The lien claimant may foreclose on a lien under
this chapter only in an action to recover the reasonable or
agreed charges.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.038. TERMINATION STATEMENT. (a) If a lien claimant
receives payment for the total amount secured by a lien under
this chapter and the lien claimant has not furnished an
agricultural chemical, agricultural seed, or labor during the
45-day period before the date on which payment is received, the
lien claimant shall file a termination statement with the
secretary of state and shall send the lien debtor a copy of the
statement as provided by this section. The statement shall state
that the lien claimant no longer claims a security interest under
the notice of claim of lien.
(b) The notice of claim of lien must be identified in the
statement under Subsection (a) by the date, names of parties to
the agreement, and file number of the original lien.
(c) If the lien claimant does not send the termination statement
required by this section before the 11th day after the date on
which the lien claimant received payment, the lien claimant is
liable to the lien debtor for actual damages suffered by the lien
debtor as a result of the failure. If the lien claimant acts in
bad faith in failing to send the statement, the lien claimant is
liable for an additional penalty of $100.
(d) The filing officer in the secretary of state's office shall
mark each termination statement with the date and time of filing
and shall index the statement under the name of the lien debtor
and under the file number of the original lien. If the filing
officer has a microfilm or other photographic record of the lien
and related filings, the filing officer may destroy the filed
notice of claim of lien at any time after receiving the
termination statement. If the filing officer does not have a
photographic record, the filing officer may destroy the filed
notice of claim of lien at any time after the first anniversary
of the date on which the filing officer received the termination
statement.
(e) The uniform filing fee for filing and indexing the
termination statement is the same as the fee assessed under
Section 9.525, Business & Commerce Code.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.04, eff.
July 1, 2001.
Sec. 128.039. RIGHT OF ASSIGNMENT OR TRANSFER; FILING OF
STATEMENT. (a) A lien created under this chapter may be
assigned by the holder of the lien, with full rights of
enforcement.
(b) The lienholder shall file a statement of assignment with the
secretary of state as provided by Section 9.514, Business &
Commerce Code.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.05, eff.
July 1, 2001.
SUBCHAPTER F. MISCELLANEOUS
Sec. 128.046. RULES. The secretary of state may adopt rules
necessary to carry out the secretary's duties under this chapter,
including prescribing necessary forms.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.047. MAXIMUM NUMBER OF LIENS. Not more than four liens
may be enforced under this chapter against the same proceeds of a
lien debtor even if the liens are filed by different lien
claimants.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.
Sec. 128.048. APPLICABILITY OF OTHER LAW. Chapter 9, Business
& Commerce Code, applies to a lien created under this chapter
to the extent Chapter 9 is consistent with this chapter.
Added by Acts 1995, 74th Leg., ch. 197, Sec. 1, eff. Sept. 1,
1995.